Our latest Data Brief focuses on measuring impact in blended finance, including (i) the types of intended development impact and (ii) common practices in measurement and reporting. Development impact is at the core of blended finance; however, it is important to recognize that blended finance is a structuring approach and not a development activity. Therefore, the impact of blended finance can be understood at two levels: the impact of the blended finance structure itself (e.g., mobilization, sustainability) and the impact on the underlying development activity.
As a structuring approach, blended finance can be used to support a broad range of development activities, from renewable energy projects to improving the quality of care provided by healthcare centers. Convergence analysis shows that reporting on impact has been limited in blended finance (as with development finance more broadly). Reporting has been more likely in certain sectors than other, and more notably more likely with certain types of vehicle / project sponors (hint: foundations and NGOs).
As blended finance increasingly becomes an important part of the development finance landscape, there has been an increased focus on impact measurement and reporting. Many concessional capital providers, in particular, are seeking to understand where and how to best use blended finance approaches to achieve measurable development impact towards the SDGs. This Brief is intended as a starting point for understanding the intended impact of blended finance as well as the common practices in impact measurement and reporting.